- A former Piers Morgan employee says he must have known about hacking
- It "happened every day" on the Mirror's show business desk in 1999, James Hipwell says
- Paul McCartney's ex-wife accuses Piers Morgan of using her as a scapegoat
- Morgan earlier said he did not believe there had been hacking at his paper
Phone hacking was widespread at the Daily Mirror newspaper when Piers Morgan was its editor, a former employee testified Wednesday, stopping just short of saying Morgan definitely knew about it.
James Hipwell said that he "cannot prove" that Morgan knew about illegal eavesdropping, but that it was "very unlikely he did not know what was going on."
Phone hacking "happened every day" at the Mirror's show business desk in late 1999, Hipwell told the Leveson Inquiry, a wide-ranging government-backed investigation of British press ethics and practices.
Also on Wednesday, Paul McCartney's ex-wife Heather Mills accused Morgan of using her as a "scapegoat."
Morgan, who now hosts the CNN talk show "Piers Morgan Tonight," testified the previous day that he did not believe phone hacking had taken place when he was editor of the tabloid.
Speaking by video link, Morgan tenaciously defended himself against accusations that he knew more about phone hacking than he has admitted in the past.
Some of the toughest questioning focused on a story based on a voice message McCartney left for his then-wife Mills, trying to make up after a quarrel and singing to her.
Morgan refused to say who played the message for him or where, but admitted under sustained questioning that he believed it was a voice mail.
"Did you know that was unethical?" demanded Robert Jay, the lead lawyer for the inquiry.
"Not unethical, no. It doesn't necessarily follow that it was unethical," Morgan said.
Mills Wednesday appeared to try to shoot down speculation that she herself had played the recording for Morgan, after Judge Brian Leveson said only she could legally have given permission for him to hear it and threatened to call her to give evidence.
"I can categorically state that I have never ever played Piers Morgan a tape of any kind, never mind a voice message from my ex-husband," she said on her website.
Morgan declined to respond.
"Piers Morgan has no additional comments re: the Leveson Inquiry or Heather Mills. His written statement and the complete transcript from the Inquiry can be found online," wrote a representative.
In August, Mills told the BBC that a journalist working for a Mirror Group publication admitted hacking her voice mail.
She said a senior Mirror Group Newspapers journalist phoned her and "started quoting verbatim the messages from my machine."
She said she replied: "You've obviously hacked my phone and if you do anything with this story ... I'll go to the police."
The journalist responded: "OK, OK, yeah, we did hear it on your voice messages, I won't run it," according to Mills.
On Wednesday, former Morgan employee Hipwell painted a picture of the editor as deeply involved in the daily workings of the paper he edited from 1995 to 2004, comparing the editor to late North Korean leader Kim Jong Il.
Morgan "was the 'Dear Leader.' It was all about him," Hipwell said.
"Nothing that happened on that desk happened without Piers knowing about it," Hipwell said of the show business desk.
A lawyer for Trinity Mirror, which publishes the Mirror, said the company disputed Hipwell's testimony and would go into more detail at a future session of the inquiry.
In the past, Morgan has vigorously denied ordering phone hacking at any point during his career.
He struck pre-emptively at Hipwell on Tuesday, pointing out that the journalist had gone to prison over a stock tip scandal and saying he would not be a reliable witness. Morgan was investigated over the stock tip scandal but not charged or convicted of any crime.
Also on Tuesday, Jay, the inquiry lawyer, repeatedly tried to use Morgan's own words against him to show he knew more about hacking than he admitted, citing his books and interviews in print and on the radio.
Morgan, at times clipped and at times testy, deflected line after line of inquiry, saying the quotes did not mean what Jay implied they did.
The Leveson Inquiry was prompted by public and political outrage at the revelation that another tabloid, Rupert Murdoch's News of the World, hacked into the phone of a missing teenage girl who later turned out to have been murdered.
Murdoch's son James ordered the best-selling paper closed over the scandal.
Much of the inquiry -- and a related police investigation -- focus on allegations of phone hacking by the News of the World.
The publisher of the paper, News International, announced Tuesday that a subsidiary had settled with seven people who accused Murdoch's newspapers of phone hacking.
The claimants included James Hewitt, who was a lover of Diana, Princess of Wales, and other British celebrities.
The newspaper group "has agreed to pay appropriate sums by way of compensation and costs and have expressed regret for the distress caused," News International said in a statement.
The company settled earlier this year with "G.I. Joe" actress Sienna Miller and a handful of other claimants, but other lawsuits against the newspaper group are outstanding.
Testimony by former staff of News of the World and News International last week focused on how much News International chief executive James Murdoch knew about hacking by his employees.
Police say notebooks seized from a private investigator working for News of the World contain the names of about 5,800 potential victims of phone hacking.
The process involves calling a cell phone and entering a personal identification number to access voice messages.